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Money Managers Aren’t Dead

Justin Fox
Money Managers Aren’t Dead

“Many academics have concluded that the value of investment advice is virtually zero,” Princeton economists William Baumol and Burton Malkiel wrote in 1968. The booming U.S. mutual fund industry, led by Fidelity Investments, had quintupled in size over the previous decade on the promise of market-beating returns and the reality of a long bull market. While the bear market that followed shrank the industry by a third, most were dismissive in 1976 when John Bogle’s Vanguard Group Inc. launched the first fund for retail investors that took the academic skepticism about investment management to heart and simply aimed to track the performance of the Standard & Poor’s 500-stock index.